Facebook has announced it is to buy Instagram, the popular photo-sharing smartphone app. Facebook is paying $1bn in cash and stock for the takeover.

Instagram was only launched in October 2010, initially just for the iPhone before being offered as an Android app last week.

Facebook's chief executive Mark Zuckerberg has pledged to continue to develop Instagram as a separate brand, allowing it to post to rival networks.

The app is free and allows users to apply 17 filters to the pictures they take, changing the color balance to give the images a different feel - before they are uploaded.

It has proven hugely popular. The firm says that it has more than 30 million users uploading more than 5 million new pictures every day.

The company has "roughly" 10 employees, according to the Associated Press.

"We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience," Mr Zuckerberg wrote on his Facebook page.

"We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook."

He added: "This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users. We don't plan on doing many more of these, if any at all."

Instagram's FAQ says it had previously raised $7.5m in funding from three venture capital firms and "a small group of angel investors".

When it launched on Google's Android platform last Tuesday, more than one million people downloaded it within 24 hours.

Mr Zuckerberg's post says Instagram's employees will be joining Facebook when the deal is completed.

The deal marks the second time in four months that Facebook has taken on staff from another social network.

In December, it announced it was hiring the co-founders of the location-based check-in service Gowalla. The network closed down shortly afterwards.

The moves come ahead of Facebook's planned flotation later this year. The firm reportedly plans to issue $5bn worth of stock on the New York-based Nasdaq exchange.

AT&T sells Yellow Pages for close to $1bn

US telecom giant AT&T has sold the Yellow Pages to a private equity firm for $950m.

AT&T shares fell 0.7% after it sold the local listings business to Cerberus Capital Management, which once owned US carmaker Chrysler.

The sale includes 1,200 Real Yellow Pages print titles, which reach 150 million US homes - as well as YP.com.

The Yellow Pages business units generated about $3.3bn in revenues in 2011.

As part of the deal, AT&T will get a 47% stake in the new entity, YP Holdings.

"It enables AT&T to focus on its core strategy of leadership in wireless, IP, cloud- and application-based services," said Jose Gutierrez, president of AT&T Advertising Solutions.

"At the same time, it gives our advertising customers, partners and developers continued access to strong advertising and search innovation and performance."

The deal includes assets of AT&T Advertising Solutions, which delivers sales and customer support, and AT&T Interactive, and is expected to be closed by the middle of the year. (Source: BBC)